Tuesday, February 10, 2015

History of Free Trade

During the free trade negotiations of the late 1980s, the Globe & Mail ran one story reporting how Canadian industrial wages would have to fall, due to competition from the United States, and another story soon after, reporting how Canadian executive compensation would have to rise, due to competition from the United States.

According to this new study (free download from here) by Jordan Brennan for Policy Alternatives, it all came true.
this report reveals that the last quarter-century of trade and investment liberalization (TAIL), beginning with the Canada-U.S. Free Trade Agreement (CUFTA) in 1988, is marked by lackluster growth, underinvestment and weak employment results. However, the most important and until now overlooked legacy of this period might be the scale and character of corporate merger activity, which has contributed to the expansion of large firms and is a key ingredient in the sluggish GDP growth and heightened income inequality of recent times.

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